Seminar Questions for The Target Corporation Case, (BOOK: Case studies in Finance managing for corporate value creation, seventh edition - Bruner Eades Schill) 1. Be prepared to describe and critique Target's capital-budgeting system. Give specific consideration to the role of the real-estate managers and the makeup of the CEC. 2. Which of the five CPRS should Doug Scovanner accept? Be prepared to explain how each of the considerations that follow influenced your decision: a. NPV and IRR b. Size of the project c. Cannibalization of other stores' sales d. Store sensitivities e. Variance to prototype f. Customer demographics g. Brand-awareness impact 3. Why does Target use different hurdle rates for the store and the credit cards (9% and 4%, respectively)? What process would you use to estimate these discount rates to see if they are reasonable? 4. As a member of the CEC, would you continue to approve CPRS if it meant that Target would need to fund the requests with external funds, either debt or equity?
Seminar Questions for The Target Corporation Case, (BOOK: Case studies in Finance managing for corporate value creation, seventh edition - Bruner Eades Schill) 1. Be prepared to describe and critique Target's capital-budgeting system. Give specific consideration to the role of the real-estate managers and the makeup of the CEC. 2. Which of the five CPRS should Doug Scovanner accept? Be prepared to explain how each of the considerations that follow influenced your decision: a. NPV and IRR b. Size of the project c. Cannibalization of other stores' sales d. Store sensitivities e. Variance to prototype f. Customer demographics g. Brand-awareness impact 3. Why does Target use different hurdle rates for the store and the credit cards (9% and 4%, respectively)? What process would you use to estimate these discount rates to see if they are reasonable? 4. As a member of the CEC, would you continue to approve CPRS if it meant that Target would need to fund the requests with external funds, either debt or equity?
Chapter5: Bond, Bond Valuation, And Interest Rates
Section: Chapter Questions
Problem 1mM
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Transcribed Image Text:Seminar Questions for The Target
Corporation Case, (BOOK: Case studies
in Finance managing for corporate
value creation, seventh edition - Bruner
Eades Schill) 1. Be prepared to describe
and critique Target's capital-budgeting
system. Give specific consideration to
the role of the real-estate managers
and the makeup of the CEC. 2. Which
of the five CPRS should Doug
Scovanner accept? Be prepared to
explain how each of the considerations
that follow influenced your decision: a.
NPV and IRR b. Size of the project c.
Cannibalization of other stores' sales d.
Store sensitivities e. Variance to
prototype f. Customer demographics g.
Brand-awareness impact 3. Why does
Target use different hurdle rates for the
store and the credit cards (9% and 4%,
respectively)? What process would you
use to estimate these discount rates to
see if they are reasonable? 4. As a
member of the CEC, would you
continue to approve CPRs if it meant
that Target would need to fund the
requests with external funds, either
debt or equity?
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